(Revise and resubmit at Theoretical Economics)
Abstract: I study the canonical independent private value auction for a single indivisible good and drop the quasilinearity restriction. I assume only that bidders are risk averse and the good for sale is a normal good. Removing quasilinearity leads to qualitatively different solutions to the auction design problem. Expected revenue is not maximized using standard auctions that allocate the good to the highest bidder. Instead, I introduce a probability demand mechanism that treats probabilities of winning the indivisible good like a divisible good in net supply one. With enough bidders, it has greater expected revenues than any standard auction.
Research in Progress
Abstract: I compare bid behavior in uniform price and Vickrey auctions when bidders have private values and multiunit demands. I remove the standard quasilinearity restriction on bidder preferences and allow for a general preference domain that includes quasilinearity and also allows budget constraints, financial constraints, risk aversion and/or wealth effects. I show that truthtelling is not a dominant strategy in the Vickrey auction. Instead bidders truthfully report demand for their first unit and overstate demands for all other units. This result mirrors the incentive for demand reduction in uniform price auctions shown by Ausubel and Cramton (2002).
Large Private Value Auctions with Risk Averse Bidders: Revenue and Efficiency
Efficient and Revenue Maximizing Auctions for Selling Many Homogenous Goods to a Large Population of Liquidity Constrained Bidders
Probability Weighting and Auction Design
Monotone Pure Strategy Equilibria of the Stackelberg Duopoly with Imperfectly Observed Demand